REASONS FOR JUDGMENT
1 On 20 February 2008 the applicant was given leave to file a fourth further amended statement of claim on or before 29 February 2008 subject to the terms contained in the order. The respondents applied for the costs of the application and other costs. They also applied for an order that they have leave to tax those costs forthwith pursuant to O 62 r 3 of the Federal Court Rules 1979 (Cth) (the Rules).
2 The application seeking leave to amend had its genesis in a notice of motion which was filed on 12 June 2007 in which the applicant sought leave to amend its third further amended statement of claim. That notice of motion was listed for mention on 9 July 2007 and was heard on 12 July 2007. On that day I made the following orders:
1. The applicant lodge and serve the applicant's proposed fourth further amended statement of claim within 28 days.
2. The hearing of the applicant's notice of motion dated 12 June 2007 to amend its further amended statement of claim be adjourned to 9.30am on 4 September 2007.
3. The applicant pay the respondent's costs of the applicant's notice of motion dated 12 June 2007 to date.
4. The respondent's notice of motion dated 26 April 2007 be adjourned to 9.30am on 4 September 2007.
3 On 16 August 2007 the parties, by agreement, consented to an extension of time within which the applicant had to lodge its proposed fourth amended statement of claim, from 9 August 2007 to 27 August 2007. The hearing of the application was adjourned again by consent to 20 September 2007.
4 On 19 September 2007 the applicant filed a notice of motion seeking an adjournment of the hearing of the notice of motion filed on 12 June 2007 to amend the applicant's third further amended statement of claim.
5 On 20 September 2007 I dismissed the applicant's notice of motion of 12 June 2007 and made the following further relevant orders:
2. The applicant pay the respondents' costs of and incidental to the notice of motion.
3. The respondents' oral application for an order that the costs be paid forthwith be reserved.
...
6. The applicant's oral application for leave to file a further amended statement of claim be adjourned to the same date and time for hearing.
6 I also made the following directions:
8. The applicant lodge with the Court and deliver to the respondents any further proposed amended statement of claim by Wednesday, 10 October 2007.
9. The respondents advise any objections to the proposed amended statement of claim by Monday, 29 October 2007.
10. The applicant respond to any notice of objection by Friday, 2 November 2007.
7 I adjourned the oral application for leave to file a further amended statement of claim to 7 November 2007.
8 On 9 October 2007 the applicant's solicitors wrote to my associate and advised that a notice of motion seeking leave to amend the applicant's third further amended statement of claim would be filed and served by 19 October 2007, together with an affidavit annexing a copy of the proposed fourth further amended statement of claim.
9 The applicant's solicitors were advised that an oral application had already been made for leave to amend the applicant's statement of claim. They were also advised that the orders so far made required the applicant to "lodge" with the Court any proposed amended statement of claim rather than file and serve that document.
10 On 19 October 2007 the applicant's solicitors again wrote to my associate advising that the proposed fourth further amended statement of claim would not be ready until the following week.
11 On 24 October 2007 the applicant sent to my chambers the proposed fourth further amended statement of claim advising that the applicant remained ready to argue its application for leave to amend its statement of claim on 7 November 2007.
12 On 31 October 2007 the applicant wrote again to my Chambers and stated that the parties proposed that the respondent provide any objections to the proposed fourth amended statement of claim by Monday, 5 November 2007. It was also proposed that the matter proceed by way of a directions hearing on 7 November 2007, instead of for the purpose of hearing the substantive application.
13 On 7 November 2007 I noted the parties' agreement:
1. The parties are to confer in relation to the respondents' objections to the proposed fourth further amended statement of claim dated 24 October 2007.
14 I made the following orders:
2. The applicant is to deliver to the respondents and to the Court any revised proposed fourth further amended statement of claim on or before 12 November 2007.
3. The respondents are to file any submissions in opposition to the proposed fourth further amended statement of claim (or revised version thereof) on or before 19 November 2007, together with any affidavit material or submissions that the respondents may seek to rely on, in respect of any order that they seek including by way of any condition to be imposed on any grant of leave to file the proposed fourth further amended statement of claim including:
(a) an order that the applicant pay the respondents' costs thrown away by reason of the amendment as agreed or taxed, payable forthwith; and
(b) an order relating to the time or times of commencement of any amendment.
4. The applicant is to file and serve any affidavit material together with any submissions upon which it will seek to rely in support of:
(a) the grant of leave to file the proposed fourth further amended statement of claim; and
(b) in relation to any issue raised by the respondents in their submissions filed under order 3 above,
on or before 23 November 2007.
5. The proceeding be stood over to 27 November 2007 at 10.15am before Lander J.
6. The question of costs be reserved.
7. All outstanding notices of motion be adjourned to the same date and time for mention.
15 On 13 November 2007 the applicant's solicitors delivered to my chambers a revised proposed fourth amended statement of claim which was one day late. The respondents' responded to the revised proposed fourth amended statement of claim by filing affidavits in opposition.
16 On 22 November 2007 the applicant's forwarded another proposed further fourth amended statement of claim in substitution of the proposed further fourth amended statement of claim which had been lodged on 13 November 2007.
17 On 23 November 2007 the respondents wrote to my chambers advising that the proposed further fourth amended statement of claim which had been lodged on 22 November 2007 was substantially different to that which had been lodged on 13 November 2007.
18 The applicant's application to file and serve a fourth further amended statement of claim did not proceed on 27 November 2007 because the respondents had not had sufficient time to address the proposed fourth further amended statement of claim which had been lodged on 22 November 2007.
19 On 27 November 2007 I made the following orders:
1. The applicant lodge with the Court and serve the respondents with the applicant's proposed statement of claim by 10 December 2007.
2. The applicant provide Lander J's associate and the respondents' solicitors with the applicant's written submissions by 14 December 2007.
3. The respondents provide Lander J's associate and the applicant's solicitors with the respondents' written submissions by 25 January 2008.
4. The applicant provide Lander J's associate and the respondents' solicitors with the applicant's written submissions in reply by 12 February 2008.
5. The applicant's application for leave to amend the applicant's statement of claim be adjourned until 9.00am on Wednesday, 20 February 2008.
6. The applicant pay the respondents' costs of the application for leave to amend up to and including today.
7. The questions as to the scale of costs and as to whether there is a further order that costs be paid forthwith be reserved.
20 It can be seen that, with the exception of the hearing on 7 November 2007, an order has been made that the applicant pay the respondents' costs of the hearings. Moreover, an order was made that the applicant pay the respondents' costs of the applicant's notice of motion of 12 June 2007 which I dismissed on 20 September 2007.
21 The question of costs of the hearing of 7 November 2007 was reserved. To avoid any doubt, there will be an order that the applicant pay the respondents' costs of that hearing.
22 The applicant's application was heard and determined on 20 February 2008. On that day, I made the following orders:
1. The applicant have leave to file a Fourth Further Amended Statement of Claim in the form initialled this day by Lander J ("FFASOC") on or before 29 February 2008, subject to the FFASOC as filed containing, in addition to paragraphs 103 to 105 inclusive as they appear in the initialled version, sub-paragraphs in each of those paragraphs:
(a) pleading the applicant's claimed status as a person aggrieved and giving particulars thereof; and
(b) stating the particular section(s) and paragraph(s) of the relevant statute that describe the entry in the respective Registers of which the applicant seeks rectification.
2. The applicant file and serve with the FFASOC proper particulars of the fiduciary duty pleading (paragraphs 21 to 53) and of the misleading and deceptive conduct pleading (paragraphs 113 to 116).
3. The time from which the amendments the subject of paragraph 1 take effect shall be reserved for trial, and for that purpose this order is a contrary order within the meaning of Order 13 rule 3A.
4. The questions of costs the subject of the parties' submissions on 20 February 2008 be reserved.
23 There can be no argument but that the applicant must pay the respondents' costs thrown away by reason of the amendments to the applicant's statement of claim as a result of the leave given to the applicant on 20 February 2008. The costs which have been thrown away will be, in due course, a matter for the taxing officer.
24 Specifically, however, the respondents sought a number of orders for costs and orders in relation to the payment of those costs:
3. The applicant pay the respondents' costs thrown away by reason of the amendments to the TFASOC, on a party and party basis as agreed or taxed, which, for the avoidance of doubt includes the costs:
3.1 thrown away by reason of the amendments to the Statement of Claim filed 18 June 2004 ("SOC") reflected in the Amended Statement of Claim filed 10 August 2004 ("ASOC");
3.2 thrown away by reason of the amendments to the ASOC reflected in the Further Amended Statement of Claim filed 13 October 2004 ("FASOC");
3.3 of and incidental to the respondents' application, made by notice of motion filed on 26 October 2004, to strike-out paragraphs of the FASOC, including the costs of the hearing on 14 December 2004;
3.4 thrown away by reason of the amendments to the FASOC reflected in the Second Further Amended Statement of Claim filed 7 January 2005 ("SFASOC") and the particulars of confidential information and source material filed 16 February 2005;
3.5 of and incidental to the respondents' application to strike out paragraphs of the SFASOC, including the costs of the hearing on 4 May 2005;
3.6 thrown away by reason of the amendments to the SFASOC reflected in the Third Further Amended Statement of Claim filed 20 May 2005 ("TFASOC");
3.7 of and incidental to the preparation of the Defence to the TFASOC filed 28 October 2005 ("Defence") (but not the Cross-Claim);
3.8 thrown away by reason of the preparation of lists of documents for discovery by reference to the TFASOC and the Defence (but not the Cross-Claim and Defence to Cross-Claim); and
3.9 of and incidental to the respondents' notice of motion filed 26 April 2007 to strike out paragraphs of the Reply filed 1 February 2007 (but not the Defence to Cross-Claim).
4. The applicant pay the respondents' costs of the applicant's application for leave to amend subsequent to 27 November 2007 up to and including the costs of the hearing on 20 February 2008, on a party and party basis as agreed or taxed.
5. The respondents have leave to tax forthwith (and such costs, as agreed or taxed to be paid forthwith):
5.1 the costs the subject of paragraph 3, save for the costs the subject of paragraphs 3.7 and 3.8;
5.2 the costs the subject of paragraph 2 of the orders of Lander J on 20 September 2007;
5.3 the costs the subject of paragraph 6 of the orders of Lander J on 27 November 2007; and
5.4 the costs the subject of paragraph 4.
6. The respondents have leave to tax forthwith (and such costs, as agreed or taxed to be paid forthwith):
6.1 the costs the subject of paragraph 1 of the orders of Lee J on 4 May 2005;
6.2 the costs the subject of paragraph 2 of the orders of French J made on 24 April 2006; and
6.3 the costs the subject of paragraph 3 of the orders of Lander J made on 3 October 2006.
25 A number of these costs orders can be dealt with immediately. The orders sought in subparagraphs 3.1, 3.2, 3.4 and 3.6 are orders for costs thrown away by reason of amendments made to the applicant's statement of claim from time to time since June 2004. There is no reason why the respondents should not have their costs in relation to those amendments. There will be an order that the applicant pay the respondents' costs including costs thrown away in relation to the amendments referred to in those subparagraphs.
26 Subparagraphs 3.3 and 3.5, which were applications heard by Lee J, must be dealt with separately. In relation to the application referred to in paragraph 3.3, Lee J made an order on that application that costs be in the cause. I am not prepared to revisit his order and that order must stand.
27 The application referred to in paragraph 3.5 was adjourned "sine die". Justice Lee reserved the question of costs. I am not sure why he reserved the question of costs and would need further information before making an order in the respondents' favour.
28 I am not prepared to make the orders in subparagraphs 3.7 and 3.8. An order that the applicant pay the respondents' costs thrown away by reason of the amendments to the various statements of claim contained in subparagraphs 3.1, 3.2, 3.4 and 3.6, and the orders made today for costs in respect of the applicant having been given leave to file a fourth further amended statement of claim, will protect the respondents insofar as the respondents have been occasioned costs by reason of those amendments. If those costs include costs thrown away by reason of the preparation of a list of documents for example, which contains documents not relevant to issues now raised on the pleadings, then the respondents can seek to have those costs included in the taxed costs.
29 I think there ought to be an order made in favour of the respondents in the terms of subparagraph 3.9. It was the respondents' notice of motion of 26 April 2007 to strike out the applicant's reply which precipitated the applicant into making its application for leave to file the fourth further amended statement of claim. I have already foreshadowed I am prepared to make the costs orders sought by the respondents in paragraph 4. The remaining question is whether or not an order should be made pursuant to O 62 r 3(3) entitling the respondents to have their bill of costs taxed in respect of previous costs orders made by other judges and me, and the costs orders made today.
30 The general rule in O 62 is that any costs awarded on any interlocutory application shall not be subject to taxation or payable until the principal proceeding is finalised.
31 The respondents accepted that the making of an order under O 62 r 3 is exceptional. There must be a reason consistent with the dictates of justice to depart from the usual rule: Thunderdome Racetiming and Scoring Pty Ltd v Dorian Industries Pty Ltd (1992) 36 FCR 297. In determining whether it would be in the interests of justice to make such an order, regard must be had to at least the following matters. First, whether there has been any fault on the party seeking an order under O 62 r 3. Secondly, whether it would be fair, in all the circumstances, to require a party in whose favour an order for costs has been made in relation to an interlocutory application to await the hearing of the principal proceeding. Thirdly, the conduct of the party against whom the order for costs has been made and, in particular, whether that party has been guilty of delay such as to cause a significant postponement of the final determination of the proceeding. Fourthly, where the costs relate to amendments to pleadings, whether the party against whom the order is sought has also been unable to articulate its claim or its defence in accordance with its obligations under the pleading rules, which has put the opposing party to significant costs. The rule should not be used to punish a party to the litigation. Costs orders are made to compensate, not to punish: Latoudis v Casey (1990) 170 CLR 534. See also Ohn v Walton (1995) 36 NSWLR 77 at 79 per Gleeson CJ; Kingscote District Council v Kangaroo Island Eco Action Inc (No 2) (1996) 67 SASR 422 at 426.
32 There are a number of examples in the authorities to which I was referred as to when the Court would exercise its discretion in favour of a party seeking an order under O 62 r 3. They are but examples. None of the authorities could fetter the discretion arising under the rule. In all of those cases, the party against whom the orders have been sought was not able to prosecute the party's claim or to advance its defence appropriately and in accordance with the Rules. The conduct was such that, in some of those cases, the Court concluded that it would be appropriate to make such an order.
33 In All Services Australia Pty Ltd v Telstra Corporation Ltd (2000) 171 ALR 330, the Court was concerned with a claim under s 52 of the Trade Practices Act 1974 (Cth). The applicant had difficulty in particularising the applicant's case and was ordered to pay the respondent's costs thrown away in relation to applications to amend its pleading. The applicant also sought to strike out the respondent's defence.
34 Justice Kiefel said at 333, [11]:
The making of an order under O 62, r 3 is justified where a court can conclude that a party in whose favour costs orders have been made to date should not be required to wait until the finalisation of the proceedings to obtain payment of them. This may be so where, through no fault of that party, there has been substantial delay in the proceedings, having the effect of substantially postponing a final determination in the matter. This most commonly arises where an applicant has attempted a number of versions of the statement of claim with the result that additional directions hearings were necessary, which should not have been; interlocutory applications had to be brought; and, moreover, substantial delays were incurred in the attempt to plead a case: see Life Airbag Company (NZ) Ltd (Fed C of A, Branson J, 22 May 1998, unreported); Harris v Cigna Insurance Australia Ltd (1995) ATPR 41-445; Batten v CTMS Ltd [1999] FCA 1576 and generally McKellar v Container Terminal Management Services Ltd [1999] FCA 1639. In Batten, the effect of the delay was that the matter could not advance, since the respondent could not be required to plead to the statement of claim in its earlier forms. That there has been some delay in a proceeding does not itself suggest an order for payment, in the interim, of costs is appropriate.
35 Her Honour found that whilst there had been some delay by reason of the amendments, not every delay is relevant to an order under O 62 r 3(2). In the case before her, the respondent was able to file a defence notwithstanding the state of the pleadings. Justice Kiefel concluded that it was a complex action and the delay in the respondent taxing its costs would not amount to much. She said to hold otherwise would be to visit a punishment on the applicant.
36 In Murran Investments Pty Ltd v Aromatic Beauty Products Pty Ltd (2000) 191 ALR 579, Mansfield J considered an application under this rule. In the proceeding before him, three separate versions of the statement of claim had been struck out and other proposed statements of claim withdrawn. Considerable time had elapsed before a satisfactory version of the statement of claim had been settled upon.
37 His Honour referred to the dicta of Kiefel J in All Services Australia Pty Ltd v Telstra Corporation 171 ALR 330 and said at 595:
[I]t is not the fact of delay which is relevant but its effect upon the proceeding and the position in which the other party is then placed. Here, the respondents have been put to significant expense which, as the costs orders indicate, has been expense which they are entitled to recover from the applicants.
38 In this case it is right, as the respondents contend, that the applicant has taken nearly four years to articulate its statement of claim in its final form (if the fourth further amended statement of claim is its final form) for reasons which are not entirely apparent. A significant problem for the applicant in its pleading has been the applicant's inability to express its claim tightly. From time to time, the looseness of expression by the applicant in its pleading has caused the applicant significant embarrassment.
39 However, the thrust of the applicant's case against the respondents has not significantly changed and the respondents have been on notice since the proceeding was commenced of that claim.
40 The respondents filed their first defence in response to the applicant's statement of claim on 31 October 2005. It filed a further defence on 23 January 2006. The respondents have not been called upon to amend its pleadings whilst the applicant has sought to put its pleading in order. In those circumstances, the respondents have not been put to the considerable costs associated with having to re-plead the matter from time to time.
41 The respondents' costs have been occasioned by needing to have considered the various proposed amendments and the hearings of the applications to amend the statement of claim. They will recover those costs in due course whatever the result of the principal proceeding.
42 The applicant's case against the respondents arises out of transactions entered into between the applicant and the respondents which, the applicant claims, gives rise to a very significant claim for damages in the hundreds of millions of dollars. If the applicant were to be successful, or even partly successful in the claim, the amount of costs which would be payable by reason of the orders already made would be an insignificant amount in the scheme of things.
43 There is no evidence that the respondents will suffer any serious disadvantage by not recovering their costs until the principal proceeding is determined. On the other hand, if the order were to be made, both parties would be put to the added expense of considering bills of costs in relation to the separate orders for costs to which reference has already been made. The applicant would need to find funds to pay those costs in advance of the hearing of the principal proceeding. It is desirable that the principal proceeding go forward as soon as possible because the principal proceeding raises important issues which need to be determined. Furthermore, this is not a proceeding where final judgment is "far away" and thus the eventuality of payment is remote: Australian Securities and Investments Commission v Mining Projects Group Limited (No 3) [2008] FCA 952 at [24] per Gordon J and the cases cited therein.
44 On balance, I do not think that this matter calls for an order under O 62 r 3. I think, on balance, the parties would be better served by proceeding with the action rather than being delayed or distracted by the taxation of costs of interlocutory proceedings.
45 There will be no order under O 62 r 3.
46 I will make the following orders in relation to costs:
1. The applicant pay the respondents' costs of the hearing of 7 November 2007.
2. The applicant pay the respondents' costs including costs thrown away by reason of the amendments to the third further amended statement of claim filed 20 May 2005 (TFASOC), on a party and party basis as agreed or taxed, which for the avoidance of doubt includes the costs:
(a) thrown away by reason of the amendments to the Statement of Claim filed 18 June 2004 (SOC) reflected in the Amended Statement the Statement of Claim filed 10 August 2004 (ASOC);
(b) thrown away by reason of the amendments to the ASOC reflected in the Further Amended Statement of Claim filed 13 October 2004 (FASOC);
(c) thrown away by reason of the amendments to the FASOC reflected in the Second Further Amended Statement of Claim filed 7 January 2005 (SFASOC) and the particulars of confidential information and source material filed 16 February 2005;
(d) thrown away by reason of the amendments to the SFASOC reflected in the TFASOC; and
(e) of and incidental to the respondents' notice of motion filed 26 April 2007 to strike out paragraphs of the Reply filed 1 February 2007;
but does not include costs:
(f) of and incidental to the respondents' application, made by notice of motion filed on 26 October 2004, to strike out paragraphs of the FASOC, including the costs of the hearing on 14 December 2004;
(g) of and incidental to the respondents' application to strike out paragraphs of the SFASOC, incuding the costs of the hearing on 4 May 2005;
(h) of and incidental to the preparation of the Defence to the TFASOC filed 28 October 2005 (Defence); and
(i) thrown away by reason of the preparation of lists of documents for discovery by reference to the TFASOC and the Defence.
3. The applicant pay the respondents' costs of the applicant's application for leave to amend subsequent to 27 November 2007 up to and including the costs of the hearing on 20 February 2008, on a party and party basis as agreed or taxed.
4. The respondents' application for leave to have costs taxed forthwith pursuant to O 62 r 3 be dismissed.
I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander.